Radio Free Enterprise

Yes, you read that correctly.

I’ll explain in a moment, but first a quick Economics lesson.

Economists talk about how every person, corporation - and living creature - arranges their affairs in the fashion that best suits them as part of what is called their Personal Utility Function. In other words your purchase decisions, choice of employment, food selections, etc. are based upon your personal tastes and beliefs regarding your likes and dislikes.

It has been shown that even an amoeba will move from a nutrient-poor environment to a nutrient-rich environment in pursuit of its own Personal Utility Function. But does that mean that animals engage in commerce? Read on and decide for yourself.

In this story from Time Magazine’s web site, researchers describe how female Indonesian Long-tailed Macaques engage in prostitution in exchange for grooming services from males. There is even a sliding price scale which reacts to the number of females available and other factors in the immediate environment.

I’ve often said that the Personal Utility Function aspect of Microeconomic Theory is almost a law of Nature. I guess the fact that monkeys are engaging in the world’s oldest profession proves me right.

Two sisters, who started Native Angels Home Care and Hospice in 2000 with just two patients, are now serving 760 patients per day and generating over $9 million annually.

Bobbie Jacobs-Ghaffar and Lesa Jacobs can now add another accomplishment to their list: the two members of the Lumbee Indian Tribe have been named National Small Business Persons of the Year by the SBA at the Small Business Week 2007 conference held April 23-24 in Washington, DC.

Among the reasons cited by the SBA in selecting Native Angels were the North Carolina company’s record of stability, employment and sales growth.

During my mother’s illness in the period leading up to her death last July, my family was blessed to have found a local company which provides the same type of service. Very few businesses engage so intimately with people’s lives as these folks do, and they are truly angels bringing blessings at perhaps the most difficult point in any person’s life.

Congratulations to these two sisters and all the angels out there.

It’s how much you keep.

Just ask David Hayden. At one time this serial entrepreneur’s net worth (on paper) exceeded $200 million. Today his stock portfolio has evaporated, he is having a hard time finding V.C. funding for his latest start-up, he’s selling many of his most prized possessions and is being sued for $24 million by Bank of America.

Like many “idea guys” in the late 1990s, Hayden created multiple business concepts which were embraced passionately by the investment community, but less so by the marketplace at large. During those go-go days, he would have been well served to take some of his profits of the table. Liquify as it were. But he didn’t. Nor did he pay close enough attention to the fine print of many of the contracts he was signing.

He also made the common mistake of accumulating possessions which were way out of line with his true needs, or actual cash flow. Now, the 52 year-old Hayden is licking his wounds and banking on his next big deal.

I recommend every entrepreneur read this cautionary tale at CNET (originally published in the New York Times) and then come back and post a comment with your reactions. What should Hayden have done differently? What would you have done differently?

Give it a read and give it some thought. Then come back here and share with the crowd.

In just our third year on the list, owners of small businesses topped the Harris Interactive poll of most trusted leaders of societal institutions in America.

In 2007, over half of U.S. adults (54%) polled expressed a great deal of confidence in leaders of small business, followed by the military at 45%. University and medical leaders tied for third at 37%.

Other institutions such as Congress, religious leaders and law firms did not fare so well. The White House has dropped from 50% to 28% in just five years. OUCH!

I am very pleased to learn of these results as they support my experience that the vast majority of business owners are extremely hard working individuals whose high level of personal and professional ethics are manifested in a superior customer experience.

The fact is, that’s what business owners have to do to succeed. Today’s consumer is not only smart - but well informed. They have access to almost unlimited information and innumerable options when making their purchase decisions. Their belief in small business owners is based on their experience, not on some idealized notion of the The Great American Entrepreneur.

Congratulations.

Entrepreneurs take risks, right?

But the question of how much risk to take always hangs in the air. The answer depends on the calendar, the business model, the competitive landscape, the resources being put into play (and at risk) and the risk tolerance of the entrpreneur in question.

Would you invest in an entrepreneur whose risk tolerance was sufficient to allow him to negotiate his own ransom with armed kidnappers - and then renege on the deal?

If you’re a stockholder in the venerable 121-year old retailer Sears, that’s just what you’re doing.

Edward S. Lampert has never been one to shy away from risk - if he’s convince the potential payoff adds up. He left Goldman Sachs at age 26 to start his own hedge fund. Now 45, worth an estimated $4.5 billion and Chairman of Sears Holdings, he is using his considerable business savvy, experience, war chest and moxy to transform Sears and Kmart into properties which can compete with the 800-pound gorilla of global retailing, Wal-Mart.

According to this article in the Washington Post he appears to be succeeding - at least on Wall Street if not on Main Street.

I don’t know about you but I like this guy Lampert. He’d make for one heck of an Entepreneurial Success Story Interview!

Stacey Griffin lost the psychiatric facility she had founded in New Orleans to the torrential rains and floods caused by Hurricane Katrina.

Ironically, she found a way to build a new business based around water. And she got a big hand in promoting it from Ellen DeGeneres.

Stacey decided that the best way to get her kids to drink more water was to package it the same way as sugary juice products - in a box. She founded Aqua2Go in her home town and sent samples with cover letters pleading for promotional help to 30 different talk shows.

The Ellen Show not only publicized Stacey and her product but also wrote and produced a humorous jingle that Ellen performed live from her stage. It now appears that Stacey will sell as many as 2.3 million boxes of water in her first year in business.

How’s that for guerilla marketing?

Don’t you just love it when someone else tells you what you’re feeling and thinking? I know I do.

So I was especially pleased to learn that Wells Fargo Bank and the Gallup Organization have just released their latest Small Business Index, a survey of 600 business owners nationwide conducted between November 9 and November 29, 2006.

Based upon that survey, here’s what we’re all thinking:

1) We are optimistic about 2007. The Small Business Owner Optimism Index is up to 69 points, equaling its highest level since the survey began in late 2003.

2) Our Top Five Concerns are: the cost of insurance (64%), taxes (62%), energy prices (54%), government regulations (45%) and finding qualified employees (42%).

3) Our Five Biggest Priorites for 2007 are: generating stronger revenues (90%), cutting operating expenses (63%), reaching more customers (57%), more advertising (42%) and investing in technology (37%).

I could swear they’re reading my mind! Maybe those people who say the government has bugged their brains aren’t crazy after all.

Seriously, I’m sure this information is useful for guaging how you’re doing and what you’re feeling relative to your peers, but it’s probably more beneficial to those who market to business owners than it is to the business owners themselves.

What do you think? Post a comment or leave me a voice mail message on the toll-free listener line at 866-690-4747. Great voice mails are always candidates for inclusion in future podcasts.

Regular readers will remember me gushing about Steve Job’s recent unveiling of the Apple iPhone - which will be available for sale beginning in June.

Could it be that I - and so many other wannabe pundits - were bewitched by Steve’s “Reality Distortion Field?”

Watch this video and decide for yourself.

This past Wednesday, two furniture delivery men were shot and critically wounded by an off-duty Prince George’s County police officer while attempting to exchange a defective bedroom set in the officer’s suburban home, just outside Washington, DC.

I don’t know all the details, but I do know this: My wife and I had an encounter with delivery men from this same company 12 years ago that culminated in a screaming match with the sales manager at their showroom.

My wife Lori, one of the most tolerant people you’ll ever meet, had to be physically restrained and carried bodily out of the building (by yours truly) after an incredible conversation which ended with the sales manager asking her, “Are you calling me a liar lady?” to which she replied “That’s exactly what I’m calling you,” as she lunged across the counter for his throat.

I have never seen her behave in any manner similiar to that in the 20+ years we have known each other.

In our case, we had asked to have a piece exchanged when it was delivered damaged. When the second delivery was also defective, we asked the guys on the truck to take it back. They called the office and were told by the sales manager to leave it with us as is - which is just what they did. The screaming match at the showroom occurred when we drove back there to get satisfaction (because no one would take our calls or call us back) and the sales manager told us he had not ordered them to leave the piece and go.

According to one news account, here’s what happened when the police officer received a scratched headboard as part of his second delivery:

“(the customer) was apparently very upset with the delivery. We have no information to believe he was upset with the gentleman. He was upset with the delivery and the exchange. They called their supervisors and were advised to simply provide the officer with the exchanged items and leave,”

Exactly what occurred is still not clear. The brother of one of the men who were shot says that they were actually in the house to repossess the furniture for non-payment. Other sources say the police officer has had past challenges with anger management, and it may be that dealing with this particular company just pushed him over the edge.

Whatever the case, while no one would condone his decision to shoot two unarmed men, some of us can relate to his level of rage. During our encounter I felt that this company’s absolute disdain for us as paying customers could tempt a saint to do the same.

Despite millions of dollars in annual advertising spending, could it be that this company refuses to go the extra step to ensure their customers’ satisfaction, thereby destroying their goodwill and losing huge amounts of potential repeat and referral business? I wonder.

If so, in this case it cost their two employees more than just a little goodwill. And it may cost the police officer his job - and freedom.

After watching a report on the case on the evening news last night, Lori and I agreed that it was a lucky thing she wasn’t armed when we walked back into the showroom that day 12 years ago.

Okay, this information will not directly help you run your business more profitably. But don’t forget, my mission is “to help business owners make more money AND have more fun.” After all, what good is money if you can’t enjoy it?

So here’s a link to a fun video on CNET’s Top 5 Most Wanted Gadgets. The ranking comes from votes cast by CNET.com readers.

The Number One Most Wanted Gadget has been mentioned on Radio Free Enterprise in the past. Take a look and see if any of your fave’s are on the list.

Enjoy, Frank